Limited buying inquiries for pellets from China have pulled down Indian pellet export prices. SteelMint’s pellet export index (Fe 64%, 3% Al, FoB east coast) has recorded a drop of around $25/t w-o-w and currently stands at $221/t.
The Indian pellet exports market has witnessed a drop for the week amid falling demand and quarantine time for the cargoes. Also, the rising production curbs in China kept the buyers away from further pellet enquiries. Mills are not in a hurry to buy due to uncertainty in production and the traders are not buying more as they are already holding higher stocks and are unable to liquidate.
“There are still berthing delays seen for Indian-origin cargoes seen at few Chinese ports which has kept traders cautious for booking cargoes at the moment, although no official announcement was heard. No bookings were reported in the last one week from India,” said a market participant.
South India-based state-owned pellet producer, KIOCL, has issued an export tender for Fe 63% (2% Al) pellets, as per SteelMint reports. The tender, due on 15 Jul’21, is only for KIOCL’s empanelled customers. The minimum quantity offered is 55,000 t. The company’s previous tender at the beginning of June was concluded at around $241/t FoB. KIOCL operates a 3.5 mn t/year pellet plant in Mangalore, Karnataka.
Another Indian private player was heard to have floated a tender for 55,000 t of pellets Fe 63 grade for Aug shipment which was due today.
“We are targeting $255-258/t CFR China for standard grade pellets,” said an eastern India-based player.
Offers for low-Al Indian-origin pellets are currently heard at around $295-300/t, CFR China.
Rationale:
- No pellet deal was heard in the publishing window. Hence, the weightage given to it is 0%.
- Seven (07) indicative offers were received, out of which five were considered for the calculation of the index and given a weightage of 100%.
Market highlights
- Spot iron ore prices down w-o-w: The spot price of iron ore fines of Fe 62% dropped to $217.85/t CFR China on 13 Jul’21 as against $222/t, CFR China a week ago. On a daily basis, prices inched down by $0.60/t as buyers retreated on competitive prices of mainstream products in the secondary market against the backdrop of steel production cuts. However, DCE iron ore futures’ most-active contract for Sept delivery jumped by RMB 36.5/t on increasing supply concerns.
- Pellet inventory up slightly w-o-w at Chinese ports: Total pellet inventory at major Chinese ports rose by 0.2 mn t to 4.1 mn t last week, as per data maintained by SteelHome.
- Domestic pellet prices stable: SteelMint’s bi-weekly domestic pellet index, PELLEX, remains stable at INR 15,550/t DAP Raipur as assessed yesterday. Deals are still not happening as there is disparity between bids and offers. Buyers are showing almost no interest in purchasing material at the prevailing high rates.
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